金融專業留學生dissertation—澳大利亞的消費信貸合同法

信貸消費指的是一個人憑借自己的信用來提取錢進行購買商品或服務。在澳大利亞金融服務的提供是在不同的監管機構之間進行分配的。對消費信貸進行監管的主要部分是政府，他們負責公平交易和管理統一的消費信貸的代碼。本文關注的是合同方面的消費信貸法律、優點和缺點，分析了在澳大利亞消費信貸的相關合同規定，提供的建議改革。dissertation的主要論點是,消費信貸系統應該給客戶提供公平信貸和消費的機會，在澳大利亞信貸開發的同時還需要考慮客戶的需要和債權人的利益。本文分為四個部分:第一部分介紹了消費信貸的歷史和目前關于消費信貸法律體系。第二部分著重于合同規定的內容和應用，然后分析合同監管方法的優缺點和NCC的NCCP行動。第三部分為合同監管提供建議。
 
Introduction
 
Consumer credit involves offering a person credit so that he or she has the money to buy goods or services. The responsibility for financial services in Australia is apportioned between different regulators. For the main part consumer credit is the responsibility of State governments and their Offices of Fair Trading which administer the Uniform Consumer Credit Code.
 
This paper focuses on the contract aspect of the consumer credit laws and analyzes the advantages and disadvantages of the related contract rules of consumer credit in Australia, before offering suggestions to reform the problems.
 
The main argument of the paper is that the consumer credit system should be improved in order to provide the customers with an opportunity of fair crediting and the regulations of the consumer crediting in Australia should be developed while taking in consideration both the need of the client and the interest of the creditor.
 
This paper is divided into four parts: the first part is a general introduction to the history of consumer credit and the present legal system about the consumer credit. The second part focuses on the contents and application of contract regulation in NCC and NCCP Act and then analyzes the advantages and disadvantages of the contract regulatory method in NCC and NCCP Act. The third part offers suggestions for contract regulation in NCC and NCCP, which are disclosure requirements practical application, managing product innovation restrictions and taking into account the force majeure cases while determining the credit limit for the cards, and avoiding of discrimination between credit providers.
 
I. Introduction of Consumer Credit Regulation
 
A. History of Consumer Credit Regulation
 
Existing of the consumer crediting in Australia has improved the life standards of its population during the 20th century. Such credits allowed households to purchase consumer durables such as cars and devices for home. In this section it is important to discuss the forms of formal consumer credits and their regulation during the 20th century.[1]#p#分頁標題#e#
 
While considering the situation until the 1980s, it is essential to make an emphasis the dominant form of consumer credits was the installment credit for retail sales.[2] The finance scheme of this credit looked the following way: the consumer got the product or service for small down payment and signed the contract, concerning the further repayments of the outstanding amount in form of predetermined installments - every month or every two weeks.[3] One more important aspect of this scheme is that the payments (installments) were paid directly to the retailer or to the finance company.[4]
 
The following types of credits were included into the installment crediting: personal loans for purchasing consumer goods, cash orders, and consumer, chattel and hire-purchase mortgages.[5] The key difference between these types of installment credits was the level of the borrowers’ protection and the degree of security for the lender.[6]
 
Usually goods or products, which were purchased due to installment plans, have served as the security for the contract. In the case if the borrower did not have a possibility to make the payments according to the credit contract, the goods have been seized (if they were recoverable). As a consequence, the conditional sale (or hire-purchase) was the dominant category of the installment crediting. According to such form of credit, the purchaser was provided with an opportunity of owning goods after signing the contract with the borrower, but the legal ownership belonged to the lender until all credit payments were done. In majority of cases the down payment was required in the conditional sale.[7]
 
Another type of lending - transactions on installment plans was considered as the credit, but at the same time there was no formal regulation, which enabled to call this type of credit as a money lending in a strict sense[8]. According to the scheme, after the buyer made the initial payment to the seller, one has signed the contract that the outstanding balance plus interest cost would be paid in the form of regular installments. After that the contract (the buyer’s promise to pay) was sold to the finance company. Therefore, such type of credit could not be considered as the money loan because the seller of the goods or products has not lent money.[9]
 
The legislative aspect of sale of goods in installment credit looked such way both in Australia and in UK, which is the reason that such credit could not be regarded as loan. That fact that there was a difference between the cash price and the higher price for the same good, which has been sold due to installment plan, was considered not as an interest charge, but as the higher price, charged for the good sold in the future than for immediate payment.[10]
 
Such legislative aspects provided the financers with an opportunity not to obtain a license or to comply with the detailed requirements, including the usury provisions, in the Moneylenders Acts of the Australian states.[11]#p#分頁標題#e#
 
There were some other contradictions in legislative aspects of consumer crediting in Australia since the late 19th century. For example, a bill of sale has not been included into the hire-purchase transaction. That is why the Bills of Sale Acts and Sale of Goods Acts of the Australian states have not covered the hire-purchase transactions, while other types of transactions would not be legal if they were not registered.[12]
 
According to the background of the consumer crediting system (legislative aspect), the Hire-Purchase Acts have been implemented into the practice in Australian states after 1930s. The main aim of these acts was regulation of formation and terms of agreements and also they provided the borrower with the right to complete payment earlier or to terminate it.[13] After the World War II, the disadvantages of the Hire-Purchase Acts became clear, because they have not taken in consideration the minimal standards of product disclosure.[14]
 
After the 1970s the situation has been finally improved and the consumer rights have been taken in consideration. As a result, the banks have provided their consumers with a flexible options and personal crediting in particular. In 1984, the installment credit waned and Hire-Purchase Acts have been replaced by the other types of consumer borrowings.[15] In 1996 the Consumer Credit Code has been adopted and it is now almost uniform across the states.[16]
 
B. Present Legal System governing Consumer Credit
 
After considering the background of the consumer credit legal aspect in Australia, it is important to pay additional attention to the current legislative situation in this area at the first step so that an objective evaluation can be made and that the recommendations offered are appropriate. The present legal system would be outlined due to the three following directions: Uniform Consumer Credit Code (UCCC), National Credit Code (NCC) and the National Consumer Credit Protection Act 2009 (NCCPA 2009).
 
1. Uniform Consumer Credit Code
 
The Uniform Consumer Credit Code (UCCC) has been approved in November, 1996 and it has started operating as the uniform national legislative scheme. It has been considered as the template for credit legislation in Queensland and in other states it was adopted in accordance with existing legislative basis. As an example, in Western Australia, the own similar legislation is enacted instead of the uniform scheme, implied by the UCCC.[17]
 
The purpose of the UCCC is to provide retail borrowing clients with rights and protection during the time of the loan application and during the term of the loan.[18] The provisions of the UCCC applies to credit providers where the customers are individuals, i.e. borrowers or guarantors or residential strata corporations where the purpose of the loan facility is wholly and predominantly for personal, domestic or household purposes.[19]
 #p#分頁標題#e#
Generally speaking, implementing amendments into the UCCC is a complicated and cumbersome process, but still there were two rounds of review: firstly, in 1998 the Post Implementation Review (PIR) has taken its place and secondly, in 2000 there was a National Competition Policy Review (NCPR). Majority of recommendations of PIR have been adopted in the Australian states and majority of recommendations, established by NCPR have been supported by the same states.[20]
 
According to The UCCC, the definition of consumer credit sale applies to the same sales transactions as those defined in the United States Federal Consumer Credit Protection Act.[21] The major concern of the Code is with consumer credit and, except for the provision on rates and maximum charges having limited applicability to non-consumer transactions, all the UCCC provisions apply only to consumer credit.[22]
 
There are several significant substantive amendments of UCCC. First of all, in December 2001 the short term lending loop-hole was closed. That, in turn, allowed the pay day lenders proliferation. Also, in July 2003, the mandatory comparison rate regime was introduced. According to the UCCC, the consumer should be provided with the particular information, concerning the chosen credit product.[23]
 
As all legislative acts, the UCCC has got its weak points, which should be improved. As an example, there is a problem concerning the discrimination between credits providers is implied by the Part 7 of the Consumer Credit Code and also the same issue is inherent to the NCC. Its essence is that the main impact on the competition between some crediting entities is done by the provisions, which impose potential costs on the linked credit providers. In such situation other providers of the credit products have no facilities to act in accordance to such regulations without losing their revenue opportunities. It is obvious that such situation should be improved in order to achieve the fair conditions on the consumer crediting market in Australia.
 
2. The introduction of NCC
 
First of all it is vital to make an emphasis that National Credit Code is considered to replace the Uniform Consumer Credit Code, with modifications.[24] The scopes of the NCC look the following way. NCC is applied in the same way as the UCCC, but it has been extended up to covering the credit for purchasing, improvement or renovation of the residential property and also for investment purposes.
 
The next issue is that the NCC may be applied if the creditor is involved into the business, within the current jurisdiction. In such case the usual residence of the debtor does not matter.[25]
 
The last area of the NCC application is the short term credits (less than 62 days). In such case charges should not exceed 5% of the total amount of credit. In this case there is no difference whether there is an association between the introducer and the credit provider or not. Also, it is important to outline the cases, when the NCC cannot be applied: if the credit arising out of bill facility; if the credit is provided by the pawnbroker; and in the case of the “margin loan”.[26]#p#分頁標題#e#
 
3. The introduction of NCCP ACT
 
National Consumer Credit Protection Act 2009 is an Australian Federal law, which has passed on 15 December 2009. This act has not been designed for complete changing of the scheme of doing business by lenders and brokers. It has been developed for introducing the scheme of registration and licensing. The key achievements of the Act are the following:
 
1) Establishing of the uniform requirement for all participants of the credit industry - the obligatory registration or appointment as the credit representatives.
 
2) Introducing changes into the information statements used when documenting NCC regulated loans;
 
3) Developing of the new direct debit default notice and several new procedures and documentation on default;
 
4) All bookers and lenders except ADIs should evaluate whether the loan suitable or not, they should take in consideration all requirements and objectives of the borrower and one’s financial situation.[27]
 
Generally, the main purpose of the NCCP Act is regulation of the consumer crediting in Australia and providing the consumers with fair terms of crediting. Also, the establishing of the limits of the credit cards is the advantage of the NCCP Act because this issue would lead to reducing of the non-payment risk (for bank or other crediting entity) and avoiding the fettering terms of the crediting for the borrower.
 
After evaluating of the destination of the NCCP Act, the additional attention would be paid to the practical application of the NCC and NCCP Act, the advantages and disadvantages, which are inherent to the current legislative basis of the consumer crediting in Australia.
 
II. Contents and Application of Contract Regulation in NCC and NCCP Act
 
A. Contents of Contract Regulation in NCC
 
The Contract law in Australia is based on the English contract law. Still, there are some modifications of principles in some areas, which are included into the Australian contract law. The development of Australian contract law was based on decisions of Australian courts and in the beginning of 1980s; Parliament of Australia has passed different pieces of legislation by the various states and territories.[28]
 
The main principle in Australia, while developing the contract law, was the principle of equity. In order to outline the specific of the contract regulation in NCC, it is important to pay additional attention to the general doctrines relating to the contract law.[29]
 
Contract is the legal agreement between two or more parties, which have mutual obligations. Every agreement includes the breach of contract as “damages”. Due to this part of the contract, the main tool for the situation improvement is "damages" or monetary compensation. Another approach towards the remedy is that it can be specific way of the contract performance or an injunction[30].#p#分頁標題#e#
 
Common law summarizes the two following elements of the contract: mutual assent and consideration. Under the mutual assent lawyers consider the offer and acceptance: one part of the contract makes an offer and another part of the contract accepts this offer. The consideration implies some value, which the promissor provides to the promisee and this value is exchanged for the other value, which the promisee gives back to the promissor.[31]
 
NCC contract regulation is alike to the previous consumer credit code (UCCC), but there are several significant differences from it. First of all, the rigorous licensing system has been established and several more obligations have been developed for the lenders and intermediaries in order to ensure the credit as an advanced responsibility.
 
More than that, new laws have established the general requirement for all credit providers. Due to the NCC, all providers of credit products should be registered as the members of external dispute resolution scheme (for example, Financial Ombudsman Service). That is done in order to ensure that the consumers are provided with access to the justice. In my opinion, the changes in the credit law landscape won’t make a great impact on the consumers immediately because there are still many active credit contracts, which were signed before July 1, 2010, and which are regulated by the old state-based laws.[32]
 
While discussing the National Credit Code of Australia, the contracts, which are regulated by this Code would be overviewed. The National Credit Code of Australia may be applied to all credit contracts, which have been entered on and after 1 July, 2010. In these credit contracts the following requirements should be followed:
 
1) The debtor should be the natural person or a strata corporation;
 
2) The credit should be provided wholly or predominantly. The predestination of the credit should be for domestic use, for personal use or for the household purposes;
 
3) It should have purchasing, renovating or investment purposes;
 
4) The interest charge should or may be done for providing credit;
 
5) The business providing process should be the dominant in course of providing credit.
 
There are the following preliminary requirements for code regulation:
 
1) The natural person or the strata corporation. The debtor should be the human being but not a corporation or trust. As an alternative, one may be the owner of corporation;
 
2) The purpose of credit. If the credit is regulated by NCC, the only purposes for it may be personal, domestic or household purposes. Expending of these purposes by the NCC include lending for residential property investment. NCC does not regulate the credits for the business development (wholly or predominantly) or for investment (excluding the residential property investment). In order to understand the percentage of credit required for the code purpose for considering it as predominantly for such a purpose, the section 5(4) of the NCC is developed.#p#分頁標題#e#
 
Due to this section it is reasonable to consider the credit as the one, provided wholly or predominantly for business, domestic or household purposes in the following cases: if more than 50% of credit would be used for the Code purpose achievement; if this credit would be applied for obtaining of goods and services, which would be further used for different purposes, but the dominant purpose in this case should be the Code purpose.
 
3) Charge for providing credit. The main issue, concerning the charge for providing the credit is that the creditor must provide the credit in the course of business. Only in such case the NCC may be applied as the main regulation tool. The main destination of applying business in this case is achieving of the system, repetition and continuity of the process. In the case when the loan is given from one friend to another, it is impossible to apply the NCC, both whether the interest charge for the loan was taken or not.
 
4) Sale by installments. The newly-developed laws of the NCC cover the following cases: “vendor terms contracts” or “terms contracts” and contracts for sale the goods by installments. These commonly used types of credits have been previously developed for providing low-income consumers with the high cost credits on onerous terms. The financing companies, which have provided such credits, have avoided the regulation under consumer credit protection laws.
 
There are the following credit contracts, which are excluded from the NCC:
 
1) Short-term credit (if it is provided for 62 days or less); but still there is the exception in the case if fee and charge exceeds 5 % of the loan or if the interest rate exceeds 24% p.a;
 
2) Credit without prior arrangement;
 
3) Credit contracts where only an account charge is payable;
 
4) Joint credit and debit facilities - in majority of Australian banks it is impossible to use the account as both a savings and a credit facility;[33]
 
5) Bills of exchange and promissory notes. The only exception can be made if such bill facilities are provided by an authorized deposit-taking institution. Only in such case this contract would fall under the regulation of the NCC; [34]
 
6) Insurance premiums payable by installments. This case is also not regulated by the NCC because in many cases there is a situation when amount of the monthly premiums exceeds the annual premium by an amount equivalent to a finance company interest rate;
 
7) Pawnbrokers,
 
8) Trustees of estates,
 
9) Employee loans,
 
10) Margin loans.[35]
 
Also, the additional attention would be paid to the disclosure requirements in the National Credit Code. According to the NCC, the following information should be included into the mortgage contract: statement of credit fees and charges, which may be payable due to the contract requirements; the amount of the ascertainable credit fees and charges, which should be paid due to the contract regulations. In the case when it is not possible to ascertain the amount of the fee, the contract should include the explained calculation method; finally, the information about possible changes in charges and fees should be included and the method of the debtors’ informing about such changes should be also attached.#p#分頁標題#e#
 
The disclosure has the following advantages. First, it is timely, because it may be applied in the two forms- pre contractual and at the point of sale. In both cases the borrower is provided with the full set of information. Second, the disclosure is regulations of the credit contract, which means that it provides the consumer with a possibility of the evaluating both of strong and weak points of the contract and as a result, the consumer may implement effective planning for the payments and for the allocation of the available sources. Third, it is repeated when the client needs that information most of all, in the case of statements and variations. Finally, it supports the Code principle of “truth in lending”. That, in turn, is the key advantage of the system because fair collaboration with the client is the key success factor for the fruitful and durable collaboration.
 
The process of the credit contract forming should follow the four essential steps: application for credit; pre-contractual information and notices; enter into credit contract; and post formation procedures.
 
While discussing the substantive contract issues, the following information would be outlined: unfair contract terms and interest rate ceilings. According to the section 78–79 of the Code, an establishment or early termination fee is unconscionable and may be considered as the unfair contract term. In the case of fees establishment by the court, the legislators should take into account the lender’s reasonable costs of determining an application for credit, and the initial administrative costs of setting up the loan; or the lender’s average reasonable costs for those things for that class of contract.[36] In my view, it is better to apply the ceilings, because the borrower should know the exact amount of the debt in order to plan the payments, according to one’s income rate. Finally, if the fee is terminated earlier, it is not acceptable when it exceeds a reasonable estimate of the credit provider’s loss, which arises from the early termination.
 
According to the NCC, the Unfair Contract Terms (UCT) provisions can be applied to the standard form consumer contracts. The main requirement in this case is that at least on of the contract parties should be an individual and the credit product or service should be acquired wholly or predominantly for personal, domestic or household use or consumption[37].
 
According to the current regulations, the term may be considered as unfair if it causes a significant imbalance in the parties’ rights. Also there is no significant importance in protection of the legitimate interests of the party who would be advantaged by the term. The term is unfair if it causes the detriment to the party it is applied or relied on.
 
At last, there is a direct correlation between detailed disclosure and improved consumer understanding, because the disclosure main aim is informing the customers about all consumer credit details. In my opinion in such manner the “truth in lending” is supported and that, in turn, reduces the risk of the contract non-payment.#p#分頁標題#e#
 
B. Contents of Contract Regulation in NCCP ACT
 
The NCCP Act establishes the national consumer credit regime.[38]There are the following regulations in the NCCP Act 2009, which is applied to the provision of the certain types of the credit, credit contracts and to the related issues.
 
The first significant aspect of the Act is that the governor or general is provided with the permissions of making regulations, which prescribing matters required or permitted by that Act to be prescribed for carrying out or giving effect to that Act.
 
While analyzing the general requirements of NCCP Act, it is needful to carry out the analogy with the NCC requirements. The main reason for that is that The National Consumer Credit Protection Act 2009 includes the National Credit Code Schedule 1 to the Act.[39]
 
According to the Schedule 1 to the Act, there are the following cases of provision of credit:
 
1) The debtor should be the natural person or a strata corporation;
 
2) The credit should be provided wholly or predominantly. The predestination of the credit should be for domestic use, for personal use or for the household purposes;
 
3) It should have purchasing, renovating or investment purposes;
 
4) The charge should or may be done for providing credit;
 
5) The business providing process should be the dominant in course of providing credit.[40]
 
Consequently, if the credit contract is regulated by the NCCP Act, it should meet all above listed requirements.
 
The next important issue, concerning the Act is its adaptation and recognition in the states of Australia. Initially, it has been based on the Uniform Credit Laws Agreement 1993 (the Agreement) of the States and Territories and formed the legislative scheme of the crediting. According to this Agreement, all the states and territories of Australia were to adopt this code as the “template” of the credit legislation.
 
Under this Agreement, the States and Territories agreed to adopt uniform consumer credit laws throughout Australia. As a result, this code has been established in the Queensland in its Consumer Credit (Queensland) Act 1994. The code has been added as an appendix to this legislation.[41]
 
Other states (Western Australia in particular) have applied this code as the law of the relevant State or Territory. Before that, Western Australia has applied its own similar local legislative base (which was allowed under the Agreement) for the consumer crediting regulation.[42]
 
Finally, on 1 November 1996 the Code and the Consumer Credit Regulations have commenced its operating in all States and Territories but Tasmania. Tasmania has commenced it on 1 March 1997.
 
There are the following conceptions, concerning the credit provision in the code: explaining of the credit, amount of credit and credit contract notions. The general cases, where the Code can be applied and those ones, which are not covered by the Code are:#p#分頁標題#e#
 
1) the rights and obligations of the borrower, according to the credit contract;
 
2) related mortgages and guarantees;
 
3) issues, concerning the credit contract ending, enforcement;
 
4) the civil penalties for defaults of credit providers;
 
5) regulation of insurance contracts, advertising;
 
6) related conduct, comparison rates and consumer leases.[43]
 
While considering the The National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011, it is important to outline the following information in order to develop the further suggestions for the system improvement and also for the effective practical application of the existing norms and regulations:
 
To begin, the amendments have been done to the initial National Consumer Credit Protection Act 2009 (NCCP Act), which has concerned the home loans and credit cards in particular. [44]
 
According to the amendment, all creditors should provide the borrowers with Key Facts Sheet, concerning the standard home loans (Part 3?2A).
 
And part 3?2B outlines the following provisions for the crediting: The restriction of using the credit cards above the credit limit; specifying in allocation hierarchy those payments, which should be made under the credit contract and credit cards; implementing the restrictions for the creditors in making the unsolicited invitations to the borrowers, concerning increasing of the credit limit of their credit cards;
 
That is why economists and lawyers consider this act as one, developed to support the customers’ interests.
 
Lawyers outline the following points of the amendment in the credit contracts regulation. First of all, the reform is expected to assist the increasing of the consumers’ capacity in the credit products choosing and in reducing the fees level and charged interest. Also, it would assist in decreasing of the risk of being provided with such credit, which overcomes the paying capacity of the client, so that one will not be able to pay the total balance within a relatively short period of time. The customers would be provided with the Key Facts Sheets. The allocation of payments in the requisite way would be controlled. The limit of the credit card would be set; that is why in the case when the limit is over, the card is not approved. Such innovation can provide the creditor with guarantees of returning the loan. The credit card industry participants’ income rate would be reduced. Additional attention would be paid to their activity in order to provide the consumers with fair and detailed information, concerning the credit product. Finally, the main costs, which have been imposed on the home loan providers initially related to the development of the adequate system and resources would be provided to the client with the Key Facts Sheets.
 
That is why, according to the information, provided by the Australian government, the Schedule 1, part 1 would be applied from 1 September 2011; Schedule 1, part 2 - from 1 July 2012; Schedule 2 - from 1 July 2012.#p#分頁標題#e#
 
There is no detailed information, concerning the date of the Sections 1 to 3 come into effect. The only information is that it would be applied when the Bill receives the Royal Assent.[45]
 
C. Advantages and Disadvantages of the contract Regulatory Method in NCC and NCCPA
 
There are several common issues for the NCC and NCCPA. For example, as it has been stated above, there are common requirements to the credit, in order to support it with the NCC and NCCPA regulations.
 
Moreover, The National Consumer Credit Protection Act 2009 includes the National Credit Code as Schedule 1 to the Act. That is why both advantages and disadvantages for the contract regulation method for NCC and NCCPA would be outlined in common.
 
One of the NCC advantages is the responsible lending obligations, which are outlined in the chapter 3 of the NCCPA. Critics consider it as the key part of the new contract regulatory regime. The main aim of the responsible lending obligations is reducing of number of the cases when the loans are granted to the consumers in prejudicial or inappropriate manner. According to the section 128 of NCCPA, there is a requirement to the lender to assess whether the crediting conditions are suitable for the customer not more than 90 days before increasing or entering the credit limit for the customer under the contract.
 
In the section 130 of the NCCPA, there are the following requirements to the lender, while carrying out the assessment of paying capacity of the client:
 
1) Making reasonable inquiries, concerning the requirements and objectives of the consumer and while taking in account the credit contract;
 
2) Making reasonable inquiries, concerning the customers financial situation and stability of incomes;
 
3) Undertaking the reasonable steps in order to verify the consumer's financial situation.[46]
 
One more advantage of the system of the contract regulatory is that section 131 of the NCCPA outlines the following cases when the credit may be considered as unsuitable one for the customer:
 
1) When the customer is not able to comply with the financial obligations due to the credit contract conditions;
 
2) When the customer could comply only with the substantial hardship;
 
3) When the contract does not meet the consumers requirements and objectives.[47]
 
Finally, it is important to make an emphasis on the fact that establishment or early termination fee is unconscionable and may be considered as the unfair contract term is one more advantage of the system.
 
The last advantage is that the creditor is required to provide the consumer with the fair information about the credit product (disclosure requirements) in the form of Key Facts Sheets, which should be attached to the consumer credit contract copy.[48]
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The amendment to the NCCPA (2011) contains the restriction of the credit cards using and access to the personal account in the case if the credit limit is over. There are two opposite approaches to this fact. From one hand, such policy would prevent numerous cases when the debtor achieves such point in loans, after which one is not able to make payments. Because credit limit setting may be considered as the result of deep analysis of the consumer financial facilities, it reflects the real situation and provides the client with that amount of money, which one may give back to the lender.
 
On the other hand, human life is unpredictable and there are some cases (diseases, accidents) which need fast response and, unfortunately, considerable amount of money, which is not always available. In such case the only way of the situation improvement is loaning and if the credit limit is over there is no hope for the human life rescuing.
 
III. Suggestions to Contract Regulation in NCCP and NCC
 
Before making the suggestions, it is necessary to pay additional attention to the restrictions and limitations, which are currently inherent to the contract regulation in NCCP and NCC. There are three main restrictions of the current credit contract regulation system: disclosure requirements, product innovation restrictions, discrimination between credit providers.
 
A. Suggestion 1: Disclosure Requirements Practical Application
 
The main aim of the disclosure requirements is providing the potential client with all important information about the credit product. In other words, that information is not the secret for the competitors and it is public available. It is evident that such aspect of the crediting activity makes its impact on the competition in the context of increasing compliance costs.
 
From the other point of view, disclosure requirements are the addressing mechanism for the truth in lending objective and the information asymmetry issues. According to the Consumer Credit (Queensland) Bill, “a consumer can make an informed choice between credit providers as to the nature of the credit being offered, as well as the comparative costs between credit providers”.[49]
 
In other words the key purpose of this statement is reinforcing the debtor’s understanding of the credit arrangements, main elements and providing the clients with an opportunity of periodical review of credit arrangements.
 
The suggestion would be developed according to Duggan & Lanyon (1999) notions[50]. In the case of the continuing credit contracts, I would suggest the following three improvements and possibilities for the debtor:
 
First of all, the debtor should be provided with the access to the account transactions information (preferable in the on-line form) for the whole statement period in order to control the payments and to be able to the effective planning, concerning the payments and the available sources allocation.#p#分頁標題#e#
 
Second, the debtor should be informed about the outstanding balance of the account and also one should be provided with the information, concerning the minimum payment due;[51]
 
Third, the debtor should be allowed to see how the terms of the contract work in practice. In other words one should be provided with all information in details, which would outline both pros and cons of the credit product and also with the information about all possible terms of the contract. For example, if the term is shorter, one would pay lower interest charge etc. That is why, the creditor should be fair in the credit details suggestion and should not press the customer’s opinion upon the preferable credit product (in many cases the representatives of the crediting entities suggest such type of credit product, which is more profitable for the entity and not always the best variant for the client- whether it concerns the period of the credit contract or the possibility of making payments earlier).[52]
 
To sum up the above listed suggestions, it is important to make an emphasis that if the creditor provides the debtor with the fair and complete information, the probability of fair and fruitful collaboration would increase because all the factors are taken into account while choosing the consumer credit product. From the other hand, the bank or another financial institution, which provides the debtor with loan, would increase its competitive advantage and attract additional clients, because the fair collaboration is the key success factor in the nowadays consumer crediting market, which is full of various credit products.
 
B. Suggestion 2: Managing Product Innovation Restrictions and taking into Account the Force Majeure Cases while Determining the Credit Limit for the Cards
 
As it has been stated above, the amendment to the NCCPA (2011) contains the restriction of the credit cards using and access to the personal account in the case if the credit limit is over. There are two opposite approaches to this fact. On one hand, such policy would prevent numerous cases when the debtor achieves such point in loans, after which one is not able to make payments. On the other hand, human life is unpredictable and there are some cases (diseases, accidents) which need fast response and, unfortunately, considerable amount of money, which is not always available. In such case the only way of the situation improvement is loaning and if the credit limit is over there is no hope for the human life rescuing.
 
There is a possibility of managing this situation, while taking into consideration both aspects of the credit limit setting. I suppose that it is reasonable to implement the possibility of the credit limit increasing in the force majeure cases. It is crucial to establish the hotline in the bank, where the borrower can call and explain the reasons of the urgent need for money. The security of the bank will be provided with all important information by the client via prone and will check the information. After that, the credit limit would be increased.#p#分頁標題#e#
 
In order to pay for the risk of the bank, it is a solution to increase the interest fee or to require the mortgage from the client.
 
Another weak point of the current crediting legislation in Australia is that according to the NCCPA regulations, the creditor is limited in the innovations implementing into the credit product market, because one is required to provide the credit amount in cash or money’s worth. Also, according to this document, fees and charges are prohibited by this act. Due to the first limitation, the creditor is not allowed to supply goods or other property instead of cash money. From one hand, such attitude limits the creditor in some crediting options, but from the other hand, the debtor is protected from the overvalued by the credit provider goods[53].
 
While taking in consideration fees and charges, the creditor is limited in the innovations implementation because some new products may require additional charges (as this paper has discussed-increasing the credit limit for the additional charge) and if the creditor is willing to introduce these products into the market, one should be aware of the prohibition of these charges. Finally, such product will not be profitable for the crediting entity. From the other hand, the debtor is protected from the unreasonable fees and charges.
 
There are several options, which may take in consideration the above listed restrictions and allow the participant of the consumer crediting market to act fair. According to the NCC, it is important to monitor the level of new fees and charges, which are unilaterally imposed by credit providers during the course of credit contracts. While referring to the current practice, the NCC is not completely applied for the restriction of the introduction of fees or charges by credit providers.[54]
 
The regulators should control this situation and should prohibit particular fees and charges in order to protect the clients from the unfair conditions of the loaning.
 
NCCPA is developed for protection and should protect those people, who are most at risk from not fair credit providers. One more important issue is that NCCPA has made both positive and negative impact stemming from this provision to date. In other words, this regulation has not been completely applied for prohibiting of the specific fees or charges because several new charges and fees have been implemented into the practice. NCCPA has been applied only as the alternative variant for controlling the unscrupulous behavior of the creditors and that is why this question should be additionally arisen and corrected. That is my second suggestion.
 
C. Suggestion 3: Avoiding Discrimination between Credit Providers
 
While taking into account the fact that the UCCC has been the first uniform national legislative scheme and NCC is applied in the same way and may be considered as advanced version of the UCCC, it is obvious that there are some common issues, which may be considered as the weak points of the system. As an example, the key problem, concerning the discrimination between credit providers is implied by the Part 7 of the Consumer Credit Code and also the same issue is inherent to the NCC. Its main essence is that the main impact on the competition between some crediting entities is done by the provisions, which impose potential costs on the linked credit providers. In such situation other providers of the credit products have no facilities to act in accordance to such regulations without losing their revenue opportunities.#p#分頁標題#e#
 
According to the NCC both supplier and linked credit provider are responsible for the any loss or damage suffered by the debtor as a result of misrepresentation. Also they are commonly responsible for any kind of breach of contract or failure of consideration in relation to the sale. And at the same time this section implies some kind of protection for the other linked credit providers.
 
One more aspect, inherent to the NCC, which is not considered as equal and fair one, is that it gives rise to some more costs and risks (administrative legal and legal liability costs) to some part of the linked credit providers and at the same time it defenses another sectors of the market (credit providers who deal directly with borrowers) from these risks and costs. At the same time, such different attitude towards credit providers is reasoned with the following facts: the supplier acts as the representative of the credit provider and that in turn, may cause additional cost incurred by the credit provider by providing greater market exposure.[55]
 
While taking the above stated arguments into consideration, the conditions for the fair competition should be initially supported by the legislative base. In such case the need of being unfair with the clients and in hiding some information about the credit product weak points won’t arise.
 
That is why there is the following option of discrimination between credit providers problem solving: setting out the conditions of the jointly liability of the supplier and linked credit provider to the debtor for any loss or damage, suffered by the debtor as a result of misrepresentation.
 
CONCLUSION
 
Currently, consumer credit system is regulated successively by the Uniform Consumer Credit Code, National Credit Code and National Consumer Credit Protection Act in Australia.
 
The Uniform Consumer Credit Code (UCCC) has been considered as the template for credit legislation in Queensland and in other states it was adopted in accordance with existing legislative basis. Subsequently, the National Credit Code (NCC) is considered to replace the Uniform Consumer Credit Code, with modifications. NCC is applied in the same way as the UCCC, but it has been extended to covering the credit for purchasing, improvement or renovation of the residential property for investment purposes. It is important to emphasize that the Contract law in Australia is based on the English contract law. In Australia the main principle while developing the contract law was the principle of equity.
 
Due to the NCC, all providers of credit products should be registered as the members of external dispute resolution scheme (for example, Financial Ombudsman Service). That is done in order to ensure that the consumers are provided with access to the justice.
 
National Consumer Credit Protection Act 2009 is an Australian Federal law, which has been developed for introducing the scheme of registration and licensing. There are the following requirements to the credit contracts, which are regulated both by NCC and NCCPA : the debtor should be the natural person or a strata corporation; the credit should be provided wholly or predominantly; the predestination of the credit should be for domestic use, for personal use or for the household purposes: purchasing, renovating or investment purposes; the interest charge should or may be done for providing credit; the business providing process should be the dominant in course of providing credit.#p#分頁標題#e#
 
According to the amendment 2011 to the NCCPA, all creditors should provide the borrowers with Key Facts Sheet, concerning the standard home loans. There are some provisions for the crediting: the restriction of using the credit cards above the credit limit; the payments, which should be made under the credit contract and credit cards, should be specified in allocation hierarchy; the creditors prohibited to make the unsolicited invitations to the borrowers, concerning increasing of the credit limit of their credit cards.
 
The amendment in the credit contracts regulation implies the following issues. First of all, the reform is expected to assist the increasing of the consumers’ capacity in the credit products choosing and in reducing the fees level and charged interest. Secondly, this reform would assist in decreasing of the risk of being provided with such credit, which overcomes the paying capacity of the client, so that one won’t be able to pay the total balance within a relatively short period of time. The payments’ allocation in the requested way would be controlled.
 
The credit card industry participants’ income rate would be reduced because additional attention would be paid to their activity in order to provide the consumers with fair and detailed information, concerning the credit product. Finally, the main costs, which have been imposed on the home loan providers would be allocated for the development of the adequate system and resources in order to provide the client with the Key Facts Sheets.
 
After considering the theoretical background of the legislative base of Australian consumer crediting, the following suggestions for the system improvement have been made: disclosure requirements practical application, managing product innovation restrictions and avoiding of discrimination between credit providers.
 
[1] Raymond Downing, Hire Purchase in the Australian Economy (1958) Bankers’ Magazine of Australasia, 71, 245-52.
 
[2] Pierre van der Eng, Consumer credit in Australia during the 20th century (School of Management, Marketing and International Business College of Business and Economics, 2008)
 
[3] Henry Arndt and Shrapnel, P, Consumer Credit in Australia, 1945-1951 (1953) Economic Record 29, 35.
 
[4] Leon Goldberg, ‘Some Early Australian Accounting Records’ (1952) the Australian Accountant 22, 346.
 
[5] Richard Clare et al, Trends in Household Debt and Assets (1989) EPAC Council Paper No.40.
 
[6] Diana Merrett, Capital Markets and Capital Formation in Australia, 1945-1990, (1998) Australian Economic History Review 38, 135-54.
 
[7]James Horne, the Diffusion of A Financial Innovation: Bankcard in Australia (1984) Department of Economics Research Paper No.112.
 
[8] Hugo Chancellor, et al, Board of Inquiry Appointed to Inquire into Hire Purchase and Cash Order Systems: Report on Hire Purchase (Canberra: Government of the Commonwealth of Australia, 1941).#p#分頁標題#e#
 
[9] Downing, above n 1, 245-52.
 
[10] Michael Griffiths, the Sustainability of Consumer Credit Growth in Late Twentieth Century Australia (2000), Journal of Consumer Studies & Home Economics, 24, 33.
 
[11] Andrew Duggan and Lanyon, Consumer Credit Law (Butterworths, 1999).
 
[12] John Malbon, Taking Credit: A Survey of Consumer Behaviour in the Australian Consumer Credit Market, Report prepared for the Consumer Credit Code Post Implementation Review Committee on behalf of the Ministerial Council on Consumer Affairs, September 1999.
 
[13] Roy Else-Mitchell and. Parsons, R. Hire-Purchase Law (Sydney: The Law Book Company, 1968).
 
[14] Thomas Molomby, Report on Fair Consumer Credit Laws to G.O.Reid, Attorney General for the State of Victoria (Melbourne: Govt. Printer, 1972).
 
[15] Susan Cavenagh and Barnes Consumer Credit Law in Australia: A Commentary on the New Credit Legislation ( Butterworths, 1998).
 
[16] Duggan and Lanyon, above n 11.
 
[17] Merrett, above n7, 38, 135-54.
 
[18] Legislation (20 May 2011) Oz Lend.
 
[19] Ibid.
 
[20] Charles Kent and Debelle, Trends in the Australian Banking System: Implications for financial system stability and monetary policy (1999)Reserve Bank of Australia Research Discussion Paper.
 
[21] J.O. Llewellyn, ‘Consumer Protection-Challenges of Change’ in R. Baxt and A.C.Cullen (eds), Consumer Credit (CCH Australia Limited, 1st ed, 1972) 27, 35.
 
[22] Ibid.
 
[23] Raymond Maskell, the Hire Purchase and Instalment Habit: Trends in Australia, New Zealand, Great Britain and the United States of America (Sydney: The Law Book Co, 1964).
 
[24] Diana Merrett, the State and the Finance Sector: The Evolution of Regulatory Apparatus (2002) Australian Economic History Review, 42, 267-83.
 
[25] Reserve Bank of Australia 1999c, Consumer credit and household finances (1999) Reserve Bank of Australia Bulletin, pp.11 – 17.
 
[26] David Jacobson., NCC: What You must do from July, 1, 2010 (2 June 2011) Langes + .
 
[27] Griffiths, above n 10, 33.
 
[28] Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 457 per the Full High Court; [1954] ALR 453; (1954) 28 ALJ 94.
 
[29] Ex parte Fealey (1897) 18 LR (NSW) L 282, SC(NSW).
 
[30] Nikolas Runcie, the Economics of Instalment Credit (University of London Press, 1969), 23.
 
[31] Standing Committee on Financial Institutions and Public Administration (1997), Cultivating Competition: inquiry into aspects of the National Competition Policy Reform Package, AGPS, Canberra, June 1997.
 
[32] Runcie, above n 30, 23.
 
[33] Merrett, above n 24, 42, 267-83.#p#分頁標題#e#
 
[34] ibid.
 
[35]David Jacobson., NCC and UCCC comparison (2 June 2011) Langes + .
 
[36] Australian Securities and Investments Commission, Mortgage early exit fees: Unconscionable fees and unfair contract term, (2 June 2011)
 
[37] S12BF, the ASIC Act.
 
[38] David Jacobson. NCC: What You must do from July, 1, (2 June 2011) Langes + .
 
[39]David Jacobson, NCC and UCCC comparison (2 June 2011) Langes + .
 
[40] NCCP Act, Schedule 1, National Credit Code.
 
[41] Johnathan Caskey, Pawnbroking in America: The Economics of a Forgotten Credit Market (1991) Journal of Money, Credit and Banking.
 
[42] Griffiths, above n 10, 24, 33.
 
[43] Roy Gelpi and Julien Labruyere, the History of Consumer Credit: Doctrines and Practice (New York: St.Martin’s, 2000).
 
[44]David Jacobson. NCC: What You must do from July, 1, (2 June 2011) Langes + .
 
[45] Claus Batt, (ed) Uniform Consumer Credit Code: Post Implementation Review Final Report (Report to the Ministerial Council on Consumer Affairs, December 1999).
 
[46] Ibid.
 
[47]David Jacobson, NCC and UCCC comparison (2 June 2011) Langes + .
 
[48] Richard Battellino, Australian financial markets: looking back and looking ahead (Reserve Bank of Australia Bulletin, March 2009).
 
[49] Ibid.
 
[50] Duggan and Lanyon, above n 11, pp570.
 
[51]David Jacobson, NCC and UCCC comparison (2 June 2011) Langes + .
 
[52] IBIS Business Information 1999d, K7330 Other Financiers, September 1999.
 
[53] Duggan and Lanyon, above n 11.
 
[54]David Jacobson, NCC and UCCC comparison (2 June 2011) Langes + .
 
[55]David Jacobson, NCC and UCCC comparison (2 June 2011) Langes + .